The proceeds of the loan will help the IDC fund its projects in Africa. While 90% of its loan book is in rands, its lending to African countries, which is growing, is mostly in foreign currency.

Bankers who are part of the syndicate say a high demand to lend to the IDC, evident in the oversubscription by 100% of the initial amount of $100m, is partly due to the disenchantment of capital markets with Latin American risk. By contrast, SA is seen as being underborrowed on international markets, and possesses politically stable with sound macroeconomic policies.

The interest rate on the threeyear loan repayable in September 2006 is 77,5 basis points over the wholesale international capital market rate, the London interbank offered rate.

This is 10 basis points higher than that paid by the Reserve Bank, which recently borrowed for government, which has the same credit rating as the IDC.

Gert Gouws, the IDC's CFO, says the facility is for "general corporate financing requirements". He says the facility is an investment grade, the same as SA's foreign currency rating. Gouws says the initial arrangements to enter the market were made well in advance of the rating agency's assessment.

In rand terms, the loan was priced at 11,25%, which amounts to the South African prime rate at the time of agreement less 3,75%. The 11,5% includes the cost of forward cover, says the IDC

Annual fees on the loan for the 23 banks amount to 21 basis points, giving a total cost for the transaction of 98 basis points over Libor.

The loan, managed by Bayerische Landesbank, BNP Paribas, Citibank, Standard Chartered Bank, and Sumitomo Mitzui Banking Corporation Europe, brought in a number of Asian banks that had not lent to the IDC before.